Gootee Construction v. Atkins Could Impact Your Bond Claims

Decision in Louisiana Court Could Impact Your Bond Claim Deadline

Because the claim was filed before the filing of the notice of completion, it was deemed premature and the claim was subsequently invalidated – this was the ruling from a Louisiana Appeals Court in late 2015.

The Case: Gootee Construction, Inc. v. Dale N. Atkins, et al.

A subcontractor, LandCoast Insulation, Inc. (“Land”), contracted with Gootee Construction, Inc. (“Gootee”) for the improvements to a public project.

There were some disagreements about work completed per the contract, etc. Ultimately, Land filed a Statement of Amount Due (aka bond claim/public improvement lien) because they were not paid for services rendered.

Gootee contested the filing, saying owner had not yet released funds because the project was not complete, therefore no money was actually due to Land, which meant that Land had no right to file a claim.

The Decision

The Court of Appeals agreed with Gootee. The court advised that Land did, in fact, file their claim too early. Here’s the court’s interpretation of statute:

“The statute does not state that the claim must be filed within forty-five days “of” acceptance, but rather, within forty-five days “after” the acceptance.”

When Land proceeded with their claim, they interpreted statute to mean that as long as they filed within 45 days of acceptance, they would be secured.

Land is not the only party to interpret statute this way – previously cited cases, Levingston Supply Co. v. American Employers’ Company and VVP AM., Inc. v. Design Build Dev. Servs., shared Land’s interpretation.

From VVP Am., Inc. v. Design Build Dev. Servs. “…the court reasoned that the statutes do not require an acceptance as a condition precedent to demand for payment or a lien. Thus, a lien can be filed before the 45-day period is activated”

Actual Statute: §2242. B. Any claimant may after the maturity of his claim and within forty-five days after the recordation of acceptance of the work by the governing authority or of notice of default of the contractor or subcontractor, file a sworn statement of the amount due him with the governing authority having the work done and record it in the office of the recorder of mortgages for the parish in which the work is done.

Case Law: Please remember, this is case law, and it can vary by court, or it could be overturned at any time!